Jeremy Warner of the Independent, a London-based newspaper, notes that the paper has been trying to come up with a better stock index to gauge the performance of the London market, but without much success.
Warner writes, “Tricky things, stock market indices, as the business reporting team at The Independent has discovered in attempting to devise an index which more accurately reflects the performance and successes of the UK economy than the measures used by FTSE, a joint venture between the Financial Times and the London Stock Exchange.
“Over the years, the FTSE 100, the most commonly used yardstick for the ups and downs of the UK stock market, has become an increasingly irrelevant guide not just to the UK economy, but even to the true stock market performance of UK companies.”
I’d hazard a guess that another reason the Independent wants to come up with its own index is so it can stop referring to one of its competitors, the FT. Such a situation existed in the United States as well in the early part of the 20th century when the Dow Jones Industrial Average, the creation of the Wall Street Journal’s owners, competed against a New York Times stock index and others. However, now the Dow is the index most commonly referred to, even though it, like the FTSE, is not considered an accurate barometer of the overall market by most experts.